Nigeria introduces cybersecurity levy on electronic transfers effective May 20

The Central Bank of Nigeria (CBN) has directed financial institutions to implement a 0.005 percent Cybersecurity Levy on electronic transfers.

This directive, outlined in a circular issued by the CBN on Monday, is set to take effect within the next two weeks.

Addressed to all banks and payment services operators in the country, the circular, issued by Director of Payment Services, Uzoma Efobi, specifies that the levy will be applied at the transaction origination and pooled into the Cybersecurity Fund held by the CBN.

The apex bank warned that institutions failing to comply could face fines of not less than two percent of their annual turnover.

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However, interbank transfers and loan transactions have been exempted from the CBN cybersecurity levy.

The circular serves as a follow-up to previous correspondences dated June 25, 2018 (Ref: BPS/DIR/GEN/CIR/05/008) and October 5, 2018 (Ref: BSD/DIR/GEN/LAB/11/023), regarding compliance with the Cybercrimes (Prohibition, Prevention, Etc.) Act 2015.

It highlights the enactment of the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024 and mandates the remittance of 0.5 percent of all electronic transactions value to the National Cybersecurity Fund, administered by the Office of the National Security Adviser.

Furthermore, the CBN emphasizes that the deducted amount should be reflected in customers’ accounts with the narration ‘Cybersecurity Levy’.

This development comes on the heels of the Federal Government’s recent implementation of a ‘Stamp Duty’ deduction. Deposit Money Banks are now required to apply a 0.375 percent stamp duty charge on all mortgage-backed loans and bonds.